Energy efficiency requirements in private rented sector properties
Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 (as amended)
The Domestic Minimum Energy Efficiency Standard (MEES) Regulations require that privately rented properties must meet a basic requirements for energy efficiency or register a valid exemption. Most domestic properties with an Energy Performance Certificate (EPC) of F or G are not permitted to be rented. The minimum EPC currently permitted is E. These requirements have been in place for several years.
Energy efficiency is important than ever because of the cost of living crisis and the high number of tenants in fuel poverty.
What is an energy performance certificate (EPC)?
An EPC is a certificate that shows how energy-efficient your property is. The document includes estimated energy costs, as well as a summary of your home's energy performance-related features.
The EPC will give the property an energy-efficiency grade between A and G, with A being the best - ie most energy-efficient - and G being the worst.
Are you a landlord planning to let a private rented property?
If you are a landlord planning to let a property with an EPC rating of F or G, you make relevant energy efficiency improvements to the property to raise the EPC rating to a minimum of level E or register a valid exemption before a tenancy is granted.
Are you a landlord currently letting a private rented property?
If you are a landlord currently letting a property with an EPC rating of F or G, you should already have made relevant energy efficiency improvements to bring the EPC rating up to a minimum of E. If you have not already done so you must raise the EPC rating to a minimum of level E or register a valid exemption straight away.
EPC’s - what does a landlord have to do?
Ensure there is a current valid EPC in place for the property being let. You can check the current EPC on the Government website here.
If the property does not have a valid EPC you must obtain one straight away.
If the EPC for the property is F or G, you must make improvements immediately to improve it to between A and E.
An EPC lasts for 10 years.
Where can a landlord find further guidance?
Guidance for landlords of domestic private rented property on how to comply with the ‘Minimum Level of Energy Efficiency’ standard (EPC band E) can be found here.
Relevant energy efficiency improvements
Your EPC report will include a list of recommendations detailing measures which should improve the energy efficiency of your property. It will include both a short list of top actions you can take, and a more detailed list further down setting out all recommended measures. The recommendations will help you choose which measure or combination of measures to install.
Common recommendations include:
- Insulation for your floor, roof, loft or walls. Better insulation reduces the need for heating, thereby lowering your energy bill.
- Double glazing: windows keep in significantly more heat when they're double-glazed, again reducing the need for heating.
- Solar panels: these produce cheaper, greener energy.
- Low-energy lighting:a smaller change that involves no structural alteration, using low-energy light bulbs is a cheap, easy way to lower energy bills.
The certificate will also include:
- the potential cost of undertaking these improvements, and the typical saving over a three-year period;
- the estimated costs of heating, lighting and hot water after improvements are made;
- total potential savings, and the energy performance rating you might receive after making improvements to your home.
There are certain exemptions a landlord can register if their properties have an EPC of F&G. The exemptions are specific and must be registered here with appropriate evidence. Full details of exemptions can be found here.
Most exemptions last for 5 years, after which you need to re-register the exemption. In some circumstances a new landlord can register a temporary exemption for 6 months.
Funding improvements to your property
The cost cap: you will never be required to spend more than £3,500 (including VAT) on energy efficiency improvements.
If you cannot improve your property to EPC E for £3,500 or less, you should make all the improvements which can be made up to that amount, then register an ‘all improvements made’ exemption.
There are 3 ways to fund the improvements to your property:
Option 1: Third party funding
If you can secure third-party funding to cover the full cost of improving your property to EPC E, you can use this, and you don’t need to invest your own funding:
You should make use of all the funding you secure to get your property to band E, or if possible higher.
- Funding can include:
- Energy Company Obligation (ECO)
- Local Authority grants
- Green Deal finance
More details on Keep Shropshire Warm can be found here.
Option 2: Combination of third-party funding and self-funding
If you can secure third-party funding but it is less than £3,500, and not enough to improve your property to EPC E you may need to top up with your own funds to the value of the cost cap.
Please note you can count any energy efficiency investment made to your property since 1 October 2017 within the cost cap, but you will be required to provide evidence of this.
If your property can be improved to E for less than the cost cap, that is all you need to spend.
Option 3: Self-funding
If you are unable to secure any funding, you need to use your own funds to improve your property. You will never need to spend more than the cost cap.
You do not need to spend up to £3,500 if your property can be improved to EPC E for less. If you can improve your property to E for less than the cap, you will have met your obligation.
If it would cost more than £3,500 to improve your property to E, you should install all recommended measures that can be installed within that amount, then register an exemption.
If you have made any energy efficiency improvements to your property since 1 October 2017, you can include the cost of those improvements within the £3,500 cost cap but you will be required to provide evidence of this.
Enforcement of the minimum level of energy efficiency
Shropshire Council is responsible for enforcing compliance with the Minimum Energy Efficiency Standards within its geographical area.
The Council is actively checking if private rented properties meet the minimum level of energy efficiency and has the power issue a compliance notice requesting information where it appears that a property has been let in breach of the Regulations or an invalid exemption has been registered in respect of it.
Where the Council is satisfied that a property has been let in breach of the Regulations it may serve a notice on the landlord imposing financial penalties (see below).
The authority may also publish details of the breach on the PRS Exemptions Register.
Where the Council is satisfied that a property has been let in breach of the Regulations it may serve a notice on the landlord imposing financial penalties.
The authority may also publish details of the breach on the PRS Exemptions Register.
The maximum penalties per property and per breach of the Regulations are:
- up to £2,000 and/or publication penalty for renting out a non-compliant property for less than 3 months
- up to £4,000 and/or publication penalty for renting out a non-compliant property for 3 months or more
- up to £1,000 and/or publication for providing false or misleading information on the PRS Exemptions Register
- up to £2,000 and/or publication for failure to comply with a compliance notice
The maximum amount you can be fined per property is £5,000 in total.
Possible future changes
Please note the Government has committed to look at a long-term trajectory to improve the energy performance standards of privately rented homes in England and Wales, with the aim for as many of them as possible to be upgraded to EPC Band C by 2030, where practical, cost-effective and affordable.
Information for tenants
Utility bills are one of the biggest household expenditures, but there are ways that you can reduce how much you spend on bills, be more energy efficient and make your home warmer. For more information on how to improve the energy efficiency of your home and save money on your utility bills visit the Keep Shropshire Warm, Energy Saving Trust and Shelter websites (linked from this page). Remember though that you shouldn't make any major or permanent changes to your property without first speaking to your landlord and gaining their permission.
Thermal map highlighting heat loss from homes
Check the heat loss performance of your own property, and even compare this with similar properties nearby, using our thermal map. Households highlighted as having excessive heat loss are shown as yellow in the map window.